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Having a Loaner

Down Time Not Allowed When Servicing Customers

Most of your quality commercial customers will carry more equipment than they can utilize at any one time. Even the one man company has several mowers, string trimmers, and blowers. Some of the reasoning for the additional equipment may be for different types of landscape or the occasion in season, where additional help is necessary to get all of the work load completed.

But for the commercial customer that can afford the equipment, the reasoning is traditionally that they do not want to have any down time due to equipment failures. Time is money, and you can't make any after sunset.

There is an opportunity for a business such as yours, to capitalize on the various situations where a customer has need for additional equipment.

What if you were to provide equipment as a loaner, for a price? The situation could get out of hand as witnessed by this example; a store started with only one walk behind mower and then added a complete rental department as he saw the potential develop to make more money.

The loaner is made available at a price that is less than comparable equipment rental at a traditional rental store. This price is given only to customers for which you are currently repairing their equipment, or for a select group of customers that spend a substantial number of dollars within your business.

You may institute a higher price for a rental to residential customers or customers that only give you a part of their business. For the latter situation, this may become a way to encourage a customer to bring more of his business to your shop.

The one concern that you may have is in making sure that you have equipment on hand, and ready for that commercial customer that will otherwise have one of his crew, or himself, standing idly by while his equipment is being repaired. This, of course, makes an excellent argument for having a two tiered shop rate.

One shop rate which is for the situation where you have the opportunity to take a piece of equipment out of sequence and provide immediate repair. And the lower rate being your traditional rate.

Deciding what equipment to make available can be based on several scenarios. Some dealers will want to use a piece of equipment that has been traded in. Working the financial side of the equation, you can usually afford to give a fair dollar for the equipment when it is traded in, perform an initial servicing, rent the equipment several times so as to recover your trade in allowance, and then reservice the equipment and sell it for a decent profit.

If your mechanics are on commission, they will like this idea because they will have the opportunity to write two service tickets on the equipment.

Another line of thinking is to take the oldest trade in equipment that you have that is still functional. Most dealers will have reservations in regards to the benefits of this thinking, because a dealer will have a very unhappy customer if this equipment breaks down in the field.

The third thought process is to use new equipment. The idea behind this is to get your commercial customers to test the newest and latest, as well as be seen out in the field using your new equipment. You will always have the possibility of a customer that brings the rental back, and wants to know what you will sell this "slightly used equipment" for.

Whichever way you decide, there are two areas that you need to check out with your insurance company. Many insurance policies will allow you to rent equipment without an increase in premiums as along as rentals are less than 25% of gross sales.

The second scenario you will need to verify is the resolution to the possibility of this rental equipment being stolen while in the possession of the customer. Understandably with most equipment, your insurance deductible will be higher than the cost of the equipment, but never the less, you should check it out.

The total package can lead to additional sales, perhaps a rental department, and most of all, customers that know you understand their needs.

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This article is copyrighted by Tom Shay and Profits Plus Solutions, who can be reached at: PO Box 128, Dardanelle, AR. 72834. Phone 727-823-7205. It may be printed for an individual to read, but not duplicated or distributed without expressed written consent of the copyright owner.

 

APRIL 2024
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I do not agree with the concept of "fill in the blank" or "create the plan as you need it" because my experience has been that you do not have as strong as a connection and understanding to your business plan unless you do it yourself and you dedicate the time to create it.

BOOK US

With over 25 years of frontline experience Tom Shay is America's leading Small Business Management Expert. He's a "Must Have" for your next event.

Small Business

Advisories

"What's your score"? is the name of the April Small Business Advisory. This provides an introduction to our return on investment calculator. It is a great way to understand how well the investment you have in your small business is working for you.

Small Business

News

 

Top Story

We believe Thursday, April 25 is an important annual celebration for small businesses. While the name of the celebration has varied over the years, the focus is for us to take kids to work with us.

 

This is important for the kids to see what it is we do. They definitely are not going to learn about it in school. Reading the April Small Business News you will see an example from community pharmacists that emphasizes it is up to us as small business owners to introduce kids to what we do.


Article of the Month

While titled, "If not price", the April Article of the Month is asking the question about the focus of your small business in attracting and keeping customers.

 

If there is not something very special about your business, then the only attraction to your businessis that of a low price.


Book of the Month

"The plan as you go business plan" is the April book of the month. The author is Tim Berry who has also created software on the same topic.

 

I do not agree with the concept of "fill in the blank" or "create the plan as you need it" because my experience has been that you do not have as strong as a connection and understanding to your business plan unless you do it yourself and you dedicate the time to create it.